Beruflich Dokumente
Kultur Dokumente
No. 19-5094
v.
STATE OF ARKANSAS,
APPELLEE
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were Mark B. Stern, Attorney, Robert P. Charrow, General
Counsel, U.S. Department of Health and Human Services, and
Brenna E. Jenny, Deputy General Counsel.
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Health and Human Services. They contend that the Secretary
acted in an arbitrary and capricious manner when he approved
Medicaid demonstration requests for Kentucky and Arkansas.
The District Court for the District of Columbia held that the
Secretary did act in an arbitrary and capricious manner because
he failed to analyze whether the demonstrations would promote
the primary objective of Medicaid—to furnish medical
assistance. After oral argument, Kentucky terminated the
challenged demonstration project and moved for voluntary
dismissal. We granted the unopposed motion. The only
question remaining before us is whether the Secretary’s
authorization of Arkansas’s demonstration is lawful. Because
the Secretary’s approval of the plan was arbitrary and
capricious, we affirm the judgment of the district court.
I. Background
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Secretary waives them so that the state can engage in
“experimental, pilot, or demonstration project[s].” 42 U.S.C.
§ 1315(a). The section authorizes the Secretary to approve
“any experimental, pilot, or demonstration project which, in the
judgment of the Secretary, is likely to assist in promoting the
objectives” of Medicaid. Id.
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services included under the plan and furnished in or after the
third month before the month in which he made application.”
42 U.S.C. § 1396a(a)(34). Arkansas Works proposed to
eliminate retroactive coverage entirely. Ark. AR 2057, 2061.
It also proposed to lower the income eligibility threshold from
133% to 100% of the federal poverty line, meaning that
beneficiaries with incomes from 101% to 133% of the federal
poverty line would lose health coverage. Id. at 2057, 2060–61,
2063. Finally, Arkansas Works eliminated a program in which
it used Medicaid funds to assist beneficiaries in paying the
premiums for employer-provided health care coverage. Id. at
2057, 2063, 2073. Arkansas instead used Medicaid premium
assistance funds only to help beneficiaries purchase a qualified
health plan available on the state Health Insurance
Marketplace, requiring all previous recipients of employer-
sponsored coverage premiums to transition to coverage offered
through the state’s Marketplace. Id. at 2057, 2063, 2073.
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Medicaid.” Id. at 3. The Secretary identified three objectives
that he asserted Arkansas Works would promote: “improving
health outcomes; . . . address[ing] behavioral and social factors
that influence health outcomes; and . . . incentiviz[ing]
beneficiaries to engage in their own health care and achieve
better health outcomes.” Id. at 4. In particular, the Secretary
stated that Arkansas Works’s community engagement
requirements would “encourage beneficiaries to obtain and
maintain employment or undertake other community
engagement activities that research has shown to be correlated
with improved health and wellness.” Id. Further, the Secretary
thought the shorter timeframe for retroactive eligibility would
“encourage beneficiaries to obtain and maintain health
coverage, even when they are healthy,” which, in turn,
promotes “the ultimate objective of improving beneficiary
health.” Id. at 5. The letter also summarized concerns raised
by commenters that the community engagement requirement
would “caus[e] disruptions in care” or “create barriers to
coverage” for beneficiaries who are not exempt. Id. at 6–7.
In response, the Secretary noted that Arkansas had several
exemptions and would “implement an outreach strategy to
inform beneficiaries about how to report compliance.” Id.
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the district court turned to the provision authorizing the
appropriations of funds for Medicaid, 42 U.S.C. § 1396-1, and
held that, based on the text of that appropriations provision, the
objective of Medicaid was to “furnish . . . medical assistance”
to people who cannot afford it. Stewart I, 313 F. Supp. 3d at
260–61.
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project would implicate the “core” objective of
Medicaid: the provision of medical coverage to the
needy.
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“experimental, pilot, or demonstration project[s],” and only
insofar as they are “likely to assist in promoting the objectives”
of Medicaid, 42 U.S.C. § 1315(a). Section 1315 approvals are
not among the rare “categories of administrative decisions that
courts traditionally have regarded as committed to agency
discretion.” Dep’t of Commerce, 139 S. Ct. at 2568.
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An agency action that “entirely failed to consider an important
aspect of the problem, offered an explanation for its decision
that runs counter to the evidence before the agency, or is so
implausible that it could not be ascribed to a difference in view
or the product of agency expertise” is arbitrary and capricious.
Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 43 (1983).
II. DISCUSSION
A. Objective of Medicaid
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social objective of granting health care coverage to those who
cannot afford it.” W. Va. Univ. Hosps., Inc. v. Casey, 885 F.2d
11, 20 (3d Cir. 1989), aff’d, 499 U.S. 83 (1991). Likewise, the
Supreme Court characterized Medicaid as a “program . . .
[that] provides joint federal and state funding of medical care
for individuals who cannot afford to pay their own medical
costs.” Ark. Dep’t of Health & Human Servs. v. Ahlborn, 547
U.S. 268, 275 (2006); see also Virginia ex rel. Hunter Labs.,
L.L.C. v. Virginia, 828 F.3d 281, 283 (4th Cir. 2016) (quoting
Ahlborn in the section of the decision explaining the important
aspects of Medicaid).
The statute and the case law demonstrate that the primary
objective of Medicaid is to provide access to medical care.
There might be secondary benefits that the government was
hoping to incentivize, such as healthier outcomes for
beneficiaries or more engagement in their health care, but the
“means [Congress] has deemed appropriate” is providing
health care coverage. MCI Telecomms. Corp. v. Am. Tel. &
Tel. Co., 512 U.S. 218, 231 n.4 (1994). In sum, “the intent of
Congress is clear” that Medicaid’s objective is to provide
health care coverage, and, as a result, the Secretary “must give
effect to [that] unambiguously expressed intent of Congress.”
Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S.
837, 842–43 (1984).
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as the objective of Medicaid, but that alternative objective
lacks textual support. Indeed, the statute makes no mention of
that objective.
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the only reference to beneficiary financial independence is in
the section summarizing public comments. In response to
concerns about the community engagement requirements
creating barriers to coverage, the Secretary stated, “Given that
employment is positively correlated with health outcomes, it
furthers the purposes of the Medicaid statute to test and
evaluate these requirements as a means to improve
beneficiaries’ health and to promote beneficiary
independence.” Ark. AR 6. But “[n]owhere in the Secretary’s
approval letter does he justify his decision based . . . on a belief
that the project will help Medicaid-eligible persons to gain
sufficient financial resources to be able to purchase private
insurance.” Gresham, 363 F. Supp. 3d at 180–81. We will not
accept post hoc rationalizations for the Secretary’s decision.
See State Farm, 463 U.S. at 50.
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The reference to independence in the appropriations
provision and the cross reference to TANF cannot support the
Secretary’s alternative objective either. The reference to
“independence” in the appropriations provision is in the
context of assisting beneficiaries in achieving functional
independence through rehabilitative and other services, not
financial independence from government welfare programs.
42 U.S.C. § 1396-1. Medicaid also grants states the “[o]ption”
to terminate Medicaid benefits when a beneficiary who
receives both Medicaid and TANF fails to comply with
TANF’s work requirements. See 42 U.S.C.
§ 1396u-1(b)(3)(A). The provision gives states, therefore, the
ability to coordinate benefits for recipients receiving both
TANF and Medicaid. It does not go so far as to incorporate
TANF work requirements and additional objectives into
Medicaid.
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Congress did not intend to incorporate work requirements into
Medicaid through § 1396u-1(b)(3)(A).
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coverage loss supported by research evidence. Ark. AR 1269–
70, 1277–78, 1285, 1294–95, 1297, 1307–08, 1320, 1326,
1337–38, 1341, 1364–65, 1402, 1421. The Secretary’s
analysis considered only whether the demonstrations would
increase healthy outcomes and promote engagement with the
beneficiary’s health care. Id. at 3–5. The Secretary noted that
some commenters were concerned that “these requirements
would be burdensome on families or create barriers to
coverage.” Id. at 6. But he explained that Arkansas would have
“outreach and education on how to comply with the new
community engagement requirements” and that Centers for
Medicare and Medicaid Services could discontinue the
program if data showed that it was no longer in the public
interest. Id. The Secretary also concluded that the “overall
health benefits to the [a]ffected population . . . outweigh the
health-risks with respect to those who fail to” comply with the
new requirements. Id. at 7. While Arkansas did not have its
own estimate of potential coverage loss, the estimates and
concerns raised in the comments were enough to alert the
Secretary that coverage loss was an important aspect of the
problem. Failure to consider whether the project will result in
coverage loss is arbitrary and capricious.
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and other services to help such families and
individuals attain or retain capability for
independence or self-care.
III. CONCLUSION